Blue Ridge Bankshares, Inc. reported a net loss of $4.2 million for the quarter ended September 30, 2026, or ($0.05) per diluted common share. The holding company attributed the deficit primarily to an after-tax provision for credit losses of $6.6 million and merger-related expenses of $0.9 million. Excluding these items, Adjusted Pre-tax Earnings rose to $5.3 million from $2.9 million in the second quarter of 2026.
The credit loss provision stemmed largely from loans associated with a single out-of-market relationship originated prior to 2024. Harry Golliday, interim president and chief executive officer, stated that the company further de-risked the balance sheet through a substantial charge-off on a legacy relationship operating in the hydroponic farming business. Golliday noted that with the regulatory consent order lifted in late 2025, the company's focus turned to soundness, profitability, and growth in core community bank markets.
Operational improvements were evident in the net interest margin, which expanded by 17 basis points to 3.08% for the third quarter. Net interest income increased by $0.9 million to $17.4 million, driven by higher yields on and average balances of loans held for investment. Average loan balances grew by $44.8 million during the period. Yields on loans held for investment reached 5.64%, up from 5.54% in the prior quarter. Conversely, interest expense declined by $0.3 million due to the reduction of higher-cost time deposits, including brokered deposits.
The company is currently merging with HomeTrust Bancshares, Inc. Under the definitive merger agreement announced on August 17, 2026, Blue Ridge Bankshares and Blue Ridge Bank will merge into HomeTrust and HomeTrust Bank, respectively. The transaction is pending required approvals, including shareholder votes from both companies, and is anticipated to close in the first quarter of 2027. Merger-related expenses for the third quarter totaled $1.2 million before tax.
For the nine months ended September 30, 2026, Blue Ridge Bankshares reported a net loss of $4.6 million, or ($0.05) per diluted common share. This compares to net income of $6.5 million, or $0.07 per diluted common share, for the same period in 2025. Adjusted Pre-tax Earnings for the nine-month period were $10.3 million, an increase from $7.0 million in the prior year period.
Balance sheet data shows total assets increased by $15.8 million to $2.34 billion at the end of the third quarter. This growth was driven primarily by a $33.1 million increase in loans held for investment, partially offset by an $18.4 million decrease in securities available for sale. Excluding brokered deposits, total deposits decreased by $19.2 million in the third quarter. Time deposits fell by $29.9 million, while money market accounts increased by $20.3 million.
On July 15, 2026, the company redeemed the remainder of its subordinated notes maturing October 15, 2029, totaling $14.7 million. Upon completion of this redemption, Blue Ridge Bankshares had no outstanding subordinated notes. The bank's tier 1 leverage ratio stood at 11.25% at September 30, 2026, compared to 11.23% at the end of the second quarter.